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Already deep in debt, Puerto Rico now faces a new crisis

Already struggling with economic woes, advocates fear Puerto Rico will soon face a health-care crisis spawned by low federal reimbursements for Medicare and Medicaid. (AP Photo/Ricardo Arduengo)

Puerto Rico has been laid low for nearly a decade by crippling debt and a near-perpetual recession that has triggered a migration to the U.S. mainland unmatched since the 1950s. Now, a growing number of people on the island worry that another crisis is looming: the collapse of the island’s health-care system.

More than 2 million patients—roughly 60 percent of Puerto Rico’s population—rely on Medicare, Medicare Advantage or Medicaid to pay for their health care. Doctors practicing in Puerto Rico are forced to get by with much smaller Medicare and Medicaid reimbursement rates than those received by their counterparts on the mainland. The difference stems from a formula that Puerto Rico advocates say underestimates commercial rents, while not fully accounting for high costs of malpractice insurance, medical equipment and utilities.

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The issue has contributed to a steady drain of doctors as advocates say nearly 400 of the island’s estimated 11,000 physicians leave the island every year. Now, the funding gap--and exodus--are certain to grow larger as the Center for Medicaid and Medicare services is on the verge of implementing an 11 percent cut in Medicare Advantage reimbursements because of the rate formula, even as the rates on the mainland are slated to go up an average of 3 percent.

The reductions will cost the island’s health-care system an estimated $500 million. Meanwhile, the island’s Medicaid program is propped up for now by a federal grant that is set to expire in the next two years. If that grant is not renewed, cash-strapped Puerto Rico will have to come up with $1.8 billion by 2018, or drastically reduce Medicaid services. At the same time, the island’s cash crunch has left it short on the money it needs to pay for its share of Medicare and Medicaid.

“This is a whopper of a problem,” said Dennis Rivera, chairman of the newly constituted Puerto Rico Healthcare Crisis Coalition. “We are facing a catastrophic health-care situation.”

With health care accounting for 20 percent of Puerto Rico’s economic activity, the change will only deepen the island’s long running economic crisis, advocates fear. The island is $73 billion in debt, saddled with unsustainably high utility rates, and several of its large state-run corporations that oversee things from highways to power generation are on the verge of defaulting on their loan obligations.

Advocates are calling on the federal government to increase reimbursement rates and to step in with special financing to help Puerto Rico avert the health care crisis. So far, however, their calls have gone unheeded.

“Puerto Rico can no longer bear the burden of inequality from unconscionable federal cuts to essential services,” Rep. Nydia Velazquez, (D-N.Y.), who closely follows issues in Puerto Rico, said in a statement. “Access to quality healthcare is not a privilege; it is a right for every American. Puerto Rico is simply asking to be treated with the fairness and dignity that all Americans deserve.”